Investment Advice

Think of a building a boat as like building a portfolio. The portfolio management process consists of the following steps:

1. Deciding on what to buy and sell;
2. Deciding on how much to buy and sell; and
3. Deciding on how to execute the trade.

While I discuss step 1 endlessly in these pages and elsewhere, the other steps are equally important. Step 2 is also a reason why what I write in these pages is not investment advice, namely I know nothing about you:

• I know nothing about your cash flow, or spending needs;
• I know nothing about your return objectives;
• I know nothing about how much risk you are willing to take, or your pain threshold;
• I know nothing about your tax situation, or even what tax jurisdictions you live in;
• And so on…

If I know nothing about any of those things, how could I possibly know if anything I write is appropriate for you? I was asked recently why I don’t post my portfolios. While posting my trades represent a disclosure of any possible conflicts in my writing, my own portfolios are a function of my own cash flow needs, my return objectives, my own pain thresholds, etc. How could any portfolio that I post be appropriate to anyone else?